Students enrolling at University College, Stockton, this year will be the first to emerge with University of Durham instead of joint Durham/Teesside degrees.
This marks the end of a collaboration between the two universities and the Teesside Development Corporation, which was originally hailed as a future model for higher education.
Financial pressures forced the University of Teesside to pull out of the venture in 1994 following a decline in student expansion.
Plans for more than 1,000 students before the year 2000 had to be shelved when the Government put the brakes on growing student numbers before the college had reached the end of its first three years. It now has 630 students compared with 130 in its first year.
A spokesman for the University of Durham said the next academic year would see the college relaunched. "It will concentrate on the idea of The University of Durham in Stockton," he said.
"Joint organisation wasn't the most efficient way to run the college. Both universities agreed to transfer the administration all to Durham."
A spokesman for the University of Teesside said the university could no longer afford to bail out the college. Instead it wanted to concentrate on building up its main Middlesborough campus.
It would meanwhile retain representatives on the college's academic board. Staff are being offered the chance to return to Teesside or continue in Stockton as University of Durham employees.
The college offers part-time and full-time modular degrees, particularly aimed at mature and local students.
When the joint project was set up at a cost of more than Pounds 12 million, it was seen as a way of expanding higher education provision without placing the two existing universities in competition for recruits.